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Unique Digital delivers a variety of
customized IT solutions and services with highly trained technical
engineers and leading-edge technologies to assist and streamline
the rapid growth of data.
TORONTO, Oct. 1, 2020
/CNW/ - Converge
Technology Solutions Corp. ("Converge" or
"the Company") (TSXV: CTS) (FSE: 0ZB) (OTCQX: CTSDF)
announced today that it has acquired Unique Digital Technology,
Inc. (Unique Digital), a Texas-based IT Solutions Provider focused on
architecting and implementing solutions in big data, cloud, data
protection, networking, security, and virtualization.
Unique Digital generated revenue of approximately $70 million for the trailing twelve-month period
ended August 31, 2020. Consideration
for the purchase consisted of US$5.35
million in cash, US$2.4
million in promissory notes and earn-out payments of up to
US$1.5 million in aggregate, payable
over three years. Assuming Unique Digital achieves the minimum
level of EBITDA to earn the full earn out, the
purchase multiple for the transaction would be approximately 3.1
times EBITDA in the third year following closing.
Assuming no earn out payments are made, the purchase multiple would
be approximately 4.4 times EBITDA for the trailing twelve-month
period ended August 31, 2020. In
addition, the company will have $1.25
million of positive working capital at closing with any
excess or shortfall to be settled post closing. The cash portion of
the purchase price was financed by Converge's recently announced
bought deal financing. The acquisition is expected to
be immediately accretive to Converge, resulting in increased
revenue and adjusted EBITDA.
Unique Digital's CEO, Andy Pratt,
will continue in his role along with the existing Unique Digital
management team. Converge will look to introduce its Software
Enabled Hybrid IT solutions including
identity-based cognitive, resiliency managed services, multi-cloud
solutions, and enterprise blockchain to existing and new
Unique Digital customers while leveraging Unique Digital
specializations ranging from cloud architecture, networking,
storage, high availability, and data protection
solutions related to mission critical environments
to Converge clients across North
America.
For over three decades, Unique Digital has delivered a
variety of customized solutions and services. Their highly trained
technical engineers work closely with organizations to successfully
execute and support their IT strategies. By partnering with
leading-edge technologies, Unique Digital assists in consolidating
and streamlining the rapid growth of data in your environment. It
offers an onsite lab where the latest
hardware and software from industry-leading
manufacturers are tested
to enhance product and solution delivery. Its
data center lab environment enables organizations to preview and
demo new technological developments before implementation or
procurement.
"We live in a data-driven world. Companies are
leveraging large pools of data to formulate their business
strategy. New technologies are being developed every day and with
that, more data is being created. By joining the Converge
family, we are confident that Unique Digital will better serve its
customers by augmenting the existing offerings and solutions. We
are excited to add Converge's platform of offerings to new and
existing customers. For us, it is the best way to continue to
architect, implement, and support the latest
technology solutions and accelerate the growth of our
organization," said Andy Pratt, CEO
of Unique Digital.
"We look forward to Unique Digital joining the Converge family
of companies," said Shaun Maine, CEO
of Converge. "Like the PCD Solutions acquisition earlier this year
in Canada, Unique Digital brings
deep VMware capabilities to Converge's US operations. With
Texas containing four of the
top-10 largest US cities (Houston,
Dallas, Austin, and San
Antonio), we expect Unique Digital's strategic alignment
with Dell Technologies as a Titanium partner and highly
trained technical staff to be critical assets in becoming a
dominant software-enabled Hybrid IT provider in the
Texas marketplace."
Unique Digital marks the thirteenth acquisition completed by
Converge since October 2017.
Converge's family of companies also includes Corus Group, LLC;
Northern Micro, Inc.; 10084182 Canada Inc. operating as
Becker-Carroll; Key Information Systems, Inc.; BlueChip Tek, Inc.;
Lighthouse Computer Systems, Inc.; Software Information Systems
LLC.; Nordisk Systems, Inc.; Essex Technology Group, Inc.;
Datatrend Technologies, Inc.; VSS, LLC; and Solutions
P.C.D., Inc.
About Converge
Converge Technology Solutions Corp. is
a North American Hybrid IT Solution Provider focused on delivering
industry leading solutions and services. Converge's regional sales
and services organizations deliver advanced analytics, cloud,
cybersecurity, and managed services offerings to clients across
various industries. The Company supports these solutions with
talent expertise and digital infrastructure offerings
across all major IT partners in the marketplace. This multi-faceted
approach enables Converge to address the unique business and
technology requirements for all clients in
the public and private sectors. For more
information, visit convergetp.com.
About Unique Digital
For over three decades, Unique
Digital has provided its customers with customized solutions and
services
to simplify, transform, and maintain their IT infrastructure. By partnering with industry-leading
technology companies, Unique Digital enables its customers to
manage complex IT demands with superior solutions. Their highly
trained technical staff addresses the entire IT infrastructure to
deliver turn-key solutions that solve current and future IT needs.
For more information, visit http://uniquedigital.com.
Notice to Reader: Use of Non-IFRS Financial Measures and
Forward-Looking Statements
1. Non-IFRS Financial Measures
In this news release, certain
non-IFRS measures to evaluate performance are used. The term
"Adjusted EBITDA" does not have any standardized meaning prescribed
within IFRS and therefore may not be comparable to similar measures
presented by other companies. Such measures should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS such as net income.
Adjusted EBITDA is defined as gross profit less selling, general
and administrative expenses, and corresponds to income
before income tax, depreciation and amortization,
finance expenses, change in fair value of contingent consideration,
transaction costs for acquisitions and other
non-operating expenses.
Management believes Adjusted
EBITDA is an important indicator as it excludes certain items that
are non-cash expenses, items that cannot be influenced by
management in the short term and items that do not impact core
operating performance, demonstrating VSS' ability to generate
liquidity through operating cash flow to fund working capital
needs, service outstanding debt and fund future capital
expenditures. Adjusted EBITDA is used by some investors and
analysts for the purposes of valuing an issuer. The intent of
Adjusted EBITDA is to provide additional useful information to
investors and analysts and is also used by
management as an internal performance
measurement.
2. Forward-Looking Information
This news release contains certain
"forward-looking information" and "forward-looking statements"
(collectively, "forward-looking statements") within the
meaning of applicable Canadian securities legislation regarding
Converge and its business. Any statement that involves discussions
with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions, future events or performance
(often but not always using phrases such as "expects,"
or "does not expect," "is expected," "anticipates," or "does not
anticipate," "plans," "budget," "scheduled," "forecasts,"
"estimates," "believes," or intends," or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could," "would," "might," or "will" be taken to occur or
be achieved) are not statements of
historical fact and may be forward-
looking statements. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable,
are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results
and future events to differ materially from those expressed or
implied by such forward-looking statements. Except as required by
law, Converge assumes no obligation to update the forward-looking
statements of beliefs, opinions, projections, or other factors,
should they change. The reader is cautioned not to place undue
reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Converge Technology Solutions Corp.